What is the penalty for missing an RMD?

The penalty for failing to take a required minimum distribution is 25% of the amount you should have withdrawn but did not. The penalty drops to 10% if you withdraw the missed RMD and file Form 5329 within the IRS correction period — which is generally by the tax deadline (including extensions) for the second year after the missed RMD. SECURE 2.0 reduced this penalty from the prior 50% rate starting in 2023.

Can the IRS waive the RMD penalty?

Yes. The IRS has authority to waive the RMD excise tax if the failure was due to a reasonable error and steps are taken to correct it. To request a waiver, you take the missed RMD, then file Form 5329 with an attachment explaining the error and that you have corrected it. The IRS routinely grants waivers for first-time misses with prompt correction. If you qualify for the reduced 10% rate by correcting within the correction period, you may not even need to apply for a full waiver.

What if I took less than my full RMD?

The penalty applies only to the shortfall — the amount you should have taken but did not. If your RMD was $15,000 and you took $10,000, the shortfall is $5,000. The penalty is 25% of $5,000 = $1,250 (or 10% = $500 if corrected within the correction window). You must also take the remaining $5,000 as soon as possible to stop the penalty from accruing further.

Can I take a prior year's missed RMD in the current year?

Yes. To correct a missed RMD, take the missed distribution as soon as possible. You will owe income tax on it in the year you actually take it (not the year it was due). You must file Form 5329 for the year the RMD was missed, listing the excise tax. If requesting a waiver, attach a statement explaining the error. Taking the distribution and filing the form promptly is the critical step — the IRS cannot impose penalties indefinitely, but they can assess penalties on the outstanding amount.

RMD Penalty 2026: What Happens If You Miss a Required Minimum Distribution

Missing a required minimum distribution triggers a significant penalty — 25% of whatever you failed to withdraw. The good news: the penalty drops to 10% if you correct quickly, and the IRS routinely waives it for honest first-time mistakes.

RMD Penalty Rate in 2026

SECURE 2.0 (effective 2023) reduced the penalty from the old 50% rate:

Situation	Penalty Rate
Missed RMD, not corrected within the correction period	25% of the amount not withdrawn
Missed RMD, corrected within the correction period	10% of the amount not withdrawn

The correction period is the period ending on the earlier of: (1) the date the IRS mails a notice of deficiency, or (2) the date you file Form 5329 — generally by the tax filing deadline (including extensions) for the second year after the year of the missed RMD.

How the Penalty Is Calculated

Example: Your 2026 RMD is $18,000. You take nothing.

Scenario	Calculation	Penalty Owed
No action taken	25% × $18,000	$4,500
Corrected within 2 years	10% × $18,000	$1,800
IRS waiver granted	0% (waiver approved)	$0

The penalty is reported and paid via Form 5329, Part IX.

Steps to Fix a Missed RMD

Take the missed RMD immediately — withdraw the full required amount (plus any additional amounts missed in prior years)
Report it on your current-year taxes — the withdrawal is income in the year taken, not the year it was due
File Form 5329 for each year an RMD was missed — not just the most recent year
Request a waiver — attach a statement to Form 5329 explaining: (a) the reason for the error, (b) that you have taken the corrected distribution, and (c) that steps have been taken to avoid future misses
Leave line 55 blank if requesting a waiver (do not calculate the penalty yourself — let the IRS respond)

IRS Waiver in Practice

The IRS almost always grants a waiver for first-time, self-reported misses with prompt correction. Common approved reasons:

Misunderstanding of the RMD starting age after SECURE/SECURE 2.0 rule changes
Relying on incorrect advice from a financial institution
Medical emergency or hospitalization
First RMD ever required (initial RBD year confusion)

The IRS expects you to: (1) take the distribution, (2) pay income tax on it, (3) file Form 5329, (4) include a reasonable explanation. If all four boxes are checked, waiver approval is typical.

Automated RMD Services

Many IRA custodians (Fidelity, Schwab, Vanguard) offer free automatic RMD services — they calculate and distribute your RMD automatically each year. Enrolling eliminates the risk of accidentally missing a distribution.

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.

The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy